Technology business management in the cloud

We recently caught up with Apptio’s SVP EMEA Colin Rowland to find out about the company’s latest announcements, including the release of the Global Technology Economy Report and the launch of a new tool designed to give companies control over their cloud spend.

First, tell us a little about Apptio.

Apptio is the business management system of record for hybrid IT. Just as sales has CRM and finance has ERP, IT also needs a business management system. Apptio helps IT and finance leaders at businesses of all sizes to understand, manage, plan and optimise their technology spend. We transform the way IT runs its business and makes decisions, and help companies validate and communicate technology investments. With Apptio, IT leaders become strategic partners to the business by demonstrating the value of IT investments, accelerating innovation and shifting their technology investments from running the business to digital innovation.

Apptio is also the founder and technical advisor for the Technology Business Management (TBM) Council, a nonprofit organisation dedicated to developing and promoting best practices, standardization and certification for managing IT like a business.

Tell us more about the TBM Council.

The TBM Council was founded in 2012, and is an active community designed to communicate the cost, quality and value of IT investments. The TBM Council aims to bring IT leaders together to develop an outlook and change in culture, which enables businesses to gain this understanding, and drive innovation through partnership with IT.

What has the Council been doing recently?

The TBM Council held its fifth annual conference in Las Vegas this November, where more than 1,350 IT and finance leaders got together to discuss how to create a culture of innovation. The Conference highlighted IT leaders in many industries, including Allstate, ExxonMobil, Prudential, Marriott, Mastercard, McDonalds and Metlife, who took the stage to discuss their TBM adoption and the meaningful impact it has made on their businesses.

Onsite at this year’s TBM Conference, we made several significant announcements, including the launch of The State of the Global Technology Economy report and Apptio Cloud Cost Management.

What does the recently launched Global Technology Economy Report include?

The State of the Global Technology Economy report, which was produced by Apptio in cooperation with Rubin Worldwide, evaluated more than 25 years of data from 3,000 organisations across more than 100 countries to find the technology economy, comprised of traditional IT spend and supporting labour, has reached more than $6.3 trillion.

This is the largest number ever reported, as other estimates do not include supporting labour in economic forecasts. Labour accounts for 40 percent of all IT cost in almost every organisation, so this is a huge force that needs to be considered when evaluating the full span of the technology economy.

Dr. Howard Rubin, the report’s author, gave a presentation at the TBM Conference, which explored the trajectory of this digital economy. Rubin also discussed a surprising finding: that companies who perform within the top 10 percent of operating margin have several traits in common. Those traits are:

They spend three times more on technology

Their overall corporate margins are 20 percent higher

100 percent of these companies use TBM

You also announced the launch of a new offering called Cloud Cost Management. What is this?

Apptio Cloud Cost Management is a cloud spend optimisation application, which allows IT leaders to make informed, real-time decisions about where and how to best deploy cloud resources within minutes of ingesting public cloud billing data. This tool enables all IT leaders, not just digital-first companies, to understand and manage cloud costs.

This is a solution built for IT leaders to allow them to accelerate their cloud adoption, while maintaining control and having transparency to make the most of every dollar spent on the cloud. Unlike any other cloud expense solutions on the market, we provide a common language of cloud services across multiple vendors that map directly to costs. This taxonomy allows IT leaders to understand and describe IT spending through an approved classification of services, covering areas such as labour, network, towers, applications, security and more.

The cloud services market is now greater than $250 billion, which is primarily driven by Amazon, Azure and Google Cloud. According to Apptio’s aggregated data, just over 70 percent of Apptio cloud users leverage AWS, 60 percent use Microsoft Azure and more than 30 percent have adopted a multi-cloud strategy. With this rise of cloud, IT organisations are encouraged to rethink the way IT is executed and imagine new ways to meet business objectives at the departmental level.

While public cloud empowers business units to innovate faster and try new things at lower cost, these costs are often buried in monthly billing data across multiple accounts and providers, business units and teams. This often makes it difficult for IT leaders to make informed decisions about the most effective use of the public cloud within their organisation. This challenge is compounded by the lack of industry standardisation. When dealing with multiple cloud providers, it can be difficult to directly equivocate certain features from one cloud system to another. Furthermore, as more companies start providing public cloud options, and companies use different cloud vendors for different projects, it becomes harder to have one view into an organization’s total spend, and thus makes the use of cloud much more complex to manage.

Apptio Cloud Cost Management provides the automation needed for companies to understand, plan and optimise their cloud costs as well as the standard model for cloud costs that is increasingly needed industry-wide. Once a foundation has been established for understanding costs in a standardised way, CIOs are able to make economically sound decisions about public cloud that enable their companies to be more agile and develop innovation IT solutions to drive business value.